http://www.whitehouse.gov/news/releases/2004/08/20040809-9.htmlFact Sheet: America's Ownership Society: Expanding Opportunities
"...if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."
-President George W. Bush, June 17, 2004
The Challenge: America's Changing Society
Life in America is changing dramatically, and President Bush believes that the Federal government should change too to help meet the challenges of our times. American families should have choices and access they need to affordable health care and homeownership; Americans should have the option of managing their own retirement; and small businesses, which employ over half of all workers, need lower taxes and fewer government mandates so they can grow.
President Bush's Policies Promoting the Ownership Society
More Access and More Choices in Health Care. The President's goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. The U.S. health care system can provide the best care in the world, but rising costs and loss of control to government and health plan bureaucrats threaten to keep patients from getting state-of-the-art care. The President's agenda includes:
Health Savings Accounts (HSAs), which combine low-cost, high-deductible health insurance with tax-free savings accounts to pay for health care expenses. The President has also proposed to make insurance premiums associated with HSAs tax deductible.
Association Health Plans (AHPs) to give America's working families greater access to affordable health insurance. By allowing small businesses to band together and negotiate on behalf of their employees and their families, AHPs would help small businesses and employees obtain health insurance at an affordable price, much like large employers and unions.
Strengthening Medicare. President Bush signed legislation in 2003 to establish a prescription drug benefit under Medicare. Under this plan, private health plans will compete for seniors' business by providing better coverage at affordable prices--helping to control the costs of Medicare by using market-place competition, not government price-setting. And seniors will be able to choose the health care plan that best fits their needs--instead of having that choice made by the government.
Expanding Homeownership. The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush's initiative to dismantle the barriers to homeownership includes:
American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;
Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;
Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and
Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.The Entrepreneurial Spirit of America: Providing Tax Relief to American Families and Small Businesses. President Bush acted promptly to help America's workers by providing tax relief to put more money in families' pockets and encourage businesses to grow and invest. Tax relief brought substantial savings to families and helped fight back the effects of the recession. America's families and small businesses have more money to spend, save, and invest because of the President's 2001 and 2003 tax cuts. This year, 111 million taxpayers will receive, on average, a tax cut of $1,586 and 25 million small business owners will receive $75 billion in total tax relief.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 accelerated the tax relief signed into law by the President in 2001, including marriage penalty relief, an increase in the child tax credit, and tax rate reductions for every family that pays income taxes.
The President's 2001 and 2003 tax cuts also provided new incentives for businesses, especially small businesses, to invest in plants and equipment and create new jobs.
President Bush has called on Congress to extend his tax relief plan set to expire next year. If Congress does not act, American families and businesses would see a tax increase starting next year, thereby hurting economic recovery and future job creation. Unless Congress takes action:
In 2006, the small business expensing limit will shrink from $100,000 to just $25,000, increasing the cost of capital investments for America's small businesses;
In 2009, the top tax rate on dividends will increase from 15 to 35 percent, while the tax on capital gains will climb from 15 to 20 percent, raising the tax burden on retirees and families investing for their future; and
In 2011, the tax rate relief, new 10-percent tax bracket, death tax repeal, marriage penalty relief, small business expensing, and all the remaining tax relief enacted over the past three years will sunset, resulting in tax increases for every individual American man or woman who pays income taxes.
Securing America's Retirement Future and Strengthening Social Security: President Bush is committed to ensuring that Social Security benefits are protected for all seniors, and allowing younger workers the option of investing in safe personal retirement accounts. Americans can also help secure their own future by saving, and President Bush has acted on policies that promote and protect saving.
Strengthening Social Security: Social Security has to be fixed for our children and grandchildren. Fifty years ago there were fifty workers paying into Social Security for every one person receiving benefits. Today there are 3.3 workers supporting each person on Social Security. By the time today's young workers retire, there will be only two. Young workers need the option to invest in retirement accounts that they will own and control. The President's plan to strengthen retirement security includes:
The President has proposed voluntary personal accounts for younger workers that would allow them to build a nest egg for retirement that they would own and control, and could pass on to their families. The President's vision for Social Security includes a permanently strengthened Social Security system, without changing benefits for those now in or near retirement, and without raising payroll taxes on workers. Inheritance rights in personal accounts would especially help widows who depend on Social Security.
The President appointed a bipartisan Commission that authored a report of recommendations to permanently fix Social Security according to the President's reform principles. Since the report of the President's Commission, six fully detailed proposals have been introduced in Congress to permanently fix Social Security, many of which adapt elements of the Commission recommendations. The President wants to work with Congress to build a consensus on the best elements of the many proposals that have been put forward. This will require leadership, bipartisanship, and public education.
Successfully fixing Social Security means that Americans who retire in 2035 will not have to use a system that was built for the world of 1935, but a system that has been modernized to meet the realities of the 21st Century.
Expanding Ownership of Retirement Assets: The tax relief legislation signed into law by the President provided almost $50 billion dollars of tax relief over the next ten years to strengthen retirement security. This landmark legislation raised the contribution limits for IRA and 401(k) accounts, allowed for additional "catch up" contributions for workers aged 50 and over, and speeded up the vesting process for employer contributions to 401(k) accounts.
New Savings Opportunities: The President has proposed to expand savings opportunities through the creation of Retirement Savings Accounts (RSAs) and Lifetime Savings Accounts (LSAs). RSAs would provide all Americans with an easy, tax-preferred way to prepare for retirement. LSAs would give all Americans the opportunity to save tax free to pay for job training, college tuition, the down-payment on a first home, a car to drive to work, or their retirement.
Ensuring Freedom of Choice: The President's proposal would ensure that workers who have participated in 401(k) plans for three years are given the freedom to choose where to invest their retirement savings. The President has also proposed that choice be a feature of Social Security itself, allowing individuals to voluntarily invest a portion of their Social Security taxes in personal retirement accounts.
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